THE average cost of building a home is set to rise by $5000 as the carbon tax pushes the price of construction materials higher.
And for those hoping to make their homes more energy-efficient there is an extra sting, with insulation and double glazing forecast to feel the full brunt of the tax.
The Master Builders Association expects at least $5000 to be added to the cost of building the average residential home, currently about $300,000.
"There's so many products that go into making a house, it's logical that a tax of this nature is going to have an impact on the sector," said MBA chief economist Peter Jones.
The MBA's modelling indicates the cost of metals -- from aluminium windows to structural steel to Colorbond roofs -- will rise by between 2 and 4 per cent.
Mineral-based products such as concrete and bricks will jump 3 per cent on average, and timber will rise by 1.5 per cent.
"Insulation prices are also expected to go up," Mr Jones said.
Fletcher Building, which has called for compensation for the glut of pink batts created by the sudden withdrawal of the $4 billion home insulation scheme, was examining its options under the assistance package for trade-exposed businesses.
Australian Glazier and Glass Association executive director Nigel Carpenter described as "ironic" a decision to give assistance to float glass manufacturers but not to smaller electricity-intensive manufacturers that make more energy-efficient building products.
"A lot of our members have invested in double-glazing units to meet government legislation and demand. None of these small manufacturers will get any assistance even though they're heavily trade-exposed," he said.
Housing Industry Association chief executive Graham Wolfe said the real question would be whether rising costs were absorbed by manufacturers or passed on to buyers.
"With the housing market slowing, it's going to be more difficult to absorb those costs," he said.
Homes Australia founder Bob Day said the impact on housing and the economy would be huge.
"The rule of thumb in the industry is that for every $1000 you add on to the price of a home, you knock out 20 first-home buyers from the market," he said.
"With homes expected to cost $5000 more at least, that's 100 people right there who can no longer afford to buy."
